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With regulations hitting asset managers hard in the last couple of years, this company is providing the solutions
Thursday 10 May 2018 Author: David Stevenson

Alpha Financial Markets Consulting (AFM:AIM) 180p

Gains to date: 8.1%

Original Entry point: Buy at 166.6p, 23 November 2017

Shares in Alpha Financial Markets Consulting (AFM:AIM) have burst into life despite the absence of any recent news.

The company provides services to 75% of the top 50 asset managers and has enjoyed sustained growth over the last few years.

In March, the company released a trading update confidently saying that its profits will be ahead of market expectations.

This was driven by new business wins and as its chief executive Euan Fraser says, ‘we are continuing to hire the very best consulting talent in the market’.

Sam England, analyst at investment bank Berenberg, says that despite the larger headcount, strong utilisations rates in the second half will support margins.

‘We believe that Alpha can continue to drive earnings upgrades as it broadens its business. While the company continues to see strong growth in its core service proposition, management has noted that newer areas like regulatory compliance, investment guidelines, digital and wealth have performed well in the second half,’ says England.

As the regulatory framework in which asset and wealth managers work gets more scrutiny, so the workload of Alpha will increase as its clients outsource functions to them.



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